How Google's band of hardware pirates has re-invented itself after its legendary leader jumped ship

Almost three years ago, one of Google’s most celebrated executives took the stage at the company’s big developer conference and declared that the future was being built in a secretive hardware group she led.

“You’re going to get a glimpse of a small band of pirates trying to do epic shit,” she said, referencing nearly a dozen ambitious technology products under development and touting the team’s quick pace of execution.

Google’s Advanced Technologies and Products group, or ATAP, still works in its own secure building on the outskirts of the Google campus, but the mission, culture, and spirit are much different than they once were, current and former members of the group told Business Insider.

“We’re not being pirates anymore,” said one person involved with ATAP. “We’re lowering the flag.”

Instead of dreaming up far-fetched research and development projects, the ATAP group now functions more like a product division tasked with shipping market-ready goods. The team of engineers and software developers now works more closely with sales and marketing employees in Google’s consumer hardware division. And the autonomy to pick projects and obtain budget — once taken for granted by the group during Dugan’s reign — is now a rigid process based as much on proving business potential as on doing something “epic.”

Dan Kaufman, a former deputy of Dugan’s who now oversees the group’s day-to-day operations, has brought a more subdued leadership style to ATAP, taking pains to stay out of the spotlight, sources said.

The changing nature of ATAP reflects Google’s ongoing efforts to adapt to a competitive, fast-moving tech market while delivering the balance of innovation and financial discipline expected by investors. With many of Google’s other moonshot projects now spun out into separate companies that are tucked under the overarching Alphabet corporation umbrella, Google is focused on efforts that directly tie into its core businesses more than ever.

GoogleRick Osterloh, Google’s hardware boss, now has ATAP reporting into him

For ATAP, that’s meant getting folded into Google’s broader hardware group, which makes everything from smartphones to streaming video TV dongles, and which is overseen by Rick Osterloh, a former Motorola executive. While the pirates once reported directly to Google CEO Sundar Pichai, the ATAP group now answers to Osterloh. Indeed, many of the changes at ATAP are due to
Osterloh’s stewardship. A lot of it also comes from Ruth Porat, the CFO of Google’s parent company Alphabet, who has spent the last two years instilling a new financial accountability across the company, sources said.
Google declined to comment on this story or make Kaufman or Osterloh available for an interview.

Smartphone without a screen

Several of the people Business Insider spoke to said the morale within the ATAP ranks remains healthy. The group’s mission may have changed, causing some to follow Dugan to her new job at Facebook, but those who remain view the change as part of the broader evolution that has shaped the company in recent years. And work continues quietly on a variety of exciting projects, even if getting the greenlight to start a project is no longer as easy as in the past.

Among the stealth projects underway is a handheld device based on the concept of “affective computing,” a discipline focused on creating gadgets that can interpret and respond to human emotions. One source referred to the project as similar to a smartphone, but without a screen. Another seemed less enthusiastic about the project, likening it to something you’d see on Kickstarter.

An MIT Media Lab project based on similar affective computing concepts, but not affiliated with the ATAP effort, describes a “touch phone” that includes a “touch-sensitive surface which conveys the user’s physical response over a computer network. The recipient sees a small coloured icon on his computer screen which changes in real time according to the way his conversational partner is interacting with the phone object.”

And in the fall ATAP plans to launch Jacquard,
a “smart” jacket that lets you control your smartphone by swiping on the fabric. The $US350 jacket, which was designed in collaboration with Levi’s and which will be the ATAP division’s first real standalone project, was originally supposed to launch this spring. People working on the project are optimistic that it will launch in time for the new fall target and said that Osterloh appears to be personally excited about it.

More secrecy

When Google holds its 3-day annual developers’ conference in Mountain View, Calif this week, the ATAP group will not have its own session, according to the official schedule, unlike during the previous two years.

The stark difference in personalities at the top has changed the face of ATAP. Many saw Dugan, who left to create a similar group at arch-rival Facebook, as the heart of ATAP’s culture. And with her gone, there has been a notable change in style.

Dugan relished in publicly unveiling jaw-dropping new projects, as she did during a keynote for Facebook a few weeks ago when she showcased projects to let people type with their brains or “hear” with their skin.

Osterloh, by contrast, has taken the opposite approach, eschewing flashy public demonstrations of prototypes. The new ATAP leadership has decided to keep projects under wraps until they’re almost fully baked, if they reveal them at all.

“Rick has set himself up as the guy who releases information,” one person familiar with the matter said. “When Rick came in, he changed the whole schedule.”

The person said that there was at least one new ATAP project scheduled to go public last year, but with Dugan gone and Kaufman and Osterloh in charge, everything was put back in stealth. According to another person close to Osterloh, the executive didn’t want the public getting distracted by something new and exciting from ATAP that may never launch. His vision was to keep the world focused on the mainstream products coming out the consumer hardware division.

Kaufman, who also worked with Dugan at DARPA and ATAP and is affectionately known as “DARPA Dan,” is another key to the quieter role ATAP has had over the last year.

“He’s much mellower than Regina,” one source said of Kaufman. “He’s the kind of guy who isn’t seeking the spotlight.”

One person close to Kaufman said that he didn’t seek the same kind of publicity and fanfare that Dugan would when she’d unveil new projects. Instead, he has tasked the division with putting their heads down on their work, while greenlighting or ramping up some new projects.

“We definitely continue to work on things,” another source said. “We’re just not going to be announcing stuff way ahead anymore.”

Graduates and dead projects

Today, ATAP projects have to fit into Google’s broader hardware ambitions, which revolves around shipping mainstream consumer products like Pixel phones and the Google Home speaker. Last year, for example, Osterloh killed ATAP’s most high-profile product, Project Ara, shortly before it was scheduled to launch. Google even had marketing plans and other promotional material ready to go.

Ara was a modular phone that would let users swap in parts like new cameras, processors, and health sensors and keep the device up to date over time. Whereas most people probably keep their phones for one or two years, an Ara phone was designed to last five years and to improve over time.

But Ara was a wildly expensive project that conflicted directly with Google’s upcoming Pixel phone. Even as recently as a month before Ara’s demise, employees were told the project was going well and on track to launch. It was dead by September of last year, about a month and a half before the Pixel’s debut. Google has also said it could use what it learned with Ara and bring the technology to other devices.

Even though Ara hardly looked like a mainstream product with its funky building block-like modules, it wasn’t the only product on the roadmap. The Ara group was also working on a high-end phone with a premium design and all the other bells and whistles you’d expect from an iPhone or Samsung Galaxy phone. The first version of Ara may have seemed experimental, but the ambition was to make Ara a mainstream consumer product. And some ATAP employees said they felt like it was killed because that would conflict too much with the Pixel. Google has said it can still use Ara technology for other projects, but nothing has come of that yet.

ATAP has had its share of successes over the years too. Project Tango, which allows phones and tablets to sense 3D space, is now being baked into Android. A Spotlight Stories animated short, Pearl, was nominated for an Oscar. Another project that made sensors that can detect congestive heart failure was acquired by Verily, Alphabet’s life sciences company.

There are other hints that ATAP continues to explore new projects. One job listing last year implied that ATAP was working on a social smartphone game following the success of “Pokémon GO.” There’s also that affective computing device. And work continues on Project Soli, which uses miniature radar to control gadgets based on hand movements.

In the meantime, current and former ATAP employees note the distinct change within the division since Dugan’s departure and how it feels more and more like a mainstream product house than the product-focused R&D lab it was originally designed to be. The two-year limit on new projects isn’t strictly enforced anymore, and there’s a chance it could go away altogether. Some even speculated that ATAP’s distinction could be eliminated and its staff and projects completely assimilated into Google’s hardware division, ending any remaining autonomy from Google its employees have enjoyed.

But in the near term, the impression within ATAP appears to be that projects will be allowed to continue as long as there’s a good chance they will result in real products or “graduate” to another division within Google. And some even said the moves were necessary to justify ATAP’s existence and keep its ambition alive.

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